We're not doing what we must to stay competitive

Friday

Jul 25, 2008 at 12:01 AM

America, this Bud should have been for you.

Mary Sanchez

America, this Bud should have been for you.

But many of us were too busy grousing about the sale of another national icon to a foreign firm to heed the wake-up call. The Belgian conglomerate InBev swallowed Anheuser-Busch in a $52 billion gulp. And across the U.S., people began choking on the news. Budweiser, after all, is known as "the great American lager." Not the "Belgian-run home of the Clydesdales."

Foreigners and their money are a touchy subject these days. What with gas at more than $4 a gallon, jobs outsourced at an increasing rate, and the U.S. Treasury in serious hock to Asian, European and Middle Eastern investors, it's not surprising that Americans regard the Bud deal as foreign plundering of their cherished brew.

Believe me, I understand the fears. Newspapers outsource copy editing and customer service to India these days. My own paper slashed 120 jobs recently - a lot of valuable co-workers were asked to leave. And most journalists know there will be more bloodletting of talent before newspapers figure out a new business model to fit an age when no one wants to pay for news they can get free on the Internet.

That said, I don't hear a great deal of introspection about how we got to this spot.

We aren't so much losing control to foreign investors as we are ceding it. As a nation, we've fallen back to Earth with a thud after soaring through a period of binge consumption paid for by borrowing against inflated home equity. Thanks to our broken finance system, the dollar has tanked against many foreign currencies, meaning our assets are cheap to foreign investors such as InBev.

And this is stoking far more troublesome attitudes: isolationism and nativism - a sort of knee-jerk reaction against anything faintly foreign and therefore threatening.

Nor is there much analysis of whether such deals are a boon or a bust for us economically. That depends. Foreign investment is good when it expands our productive capacity, boosting GDP and paying wages. It's not so good when foreigners lend us money to buy their cheap TVs and the McMansions to put them in.

In 2007, foreign investors put a record $414 billion into American enterprise - more than a 90 percent increase from the prior year. Five million Americans work for foreign companies set up in the U.S. Such workers earn about 30 percent more than their counterparts employed at U.S.-owned shops.

And yet opportunistic politicians know they can court votes by playing to fears about free trade agreements and foreign companies operating on U.S. soil.

Some in Congress squealed before, during and after the InBev merger. But the newly formed Anheuser-Busch InBev ranks as the world's largest beer maker. Both firms already had huge reaches into foreign markets. Combined, they are anticipated to dominate. InBev vows that the 12 U.S. breweries of Anheuser-Busch will stay open - a pledge not in dispute as long as Americans keep drinking Bud.

As columnist Thomas L. Friedman has pointed out, "The world is flat." Technology, trade agreements and rising education rates in foreign countries are making the rest of the world far more competitive with the U.S. than we ever conceived it could be.

Rather than crying in our beer, we should be making sure America remains innovative and American students are educated to be players in a global economy. Foreign takeovers are going to be a fact of life - and not necessarily a bad one. More worrisome are our sagging rates of achievement in math and science compared with other industrialized countries, and the fact that our doctorate programs are dominated by foreign-born students who simply out-study their U.S. counterparts.

This generation's Sputnik moment is upon us - a nation that borrows to consume beyond its means sooner or later is going to have to sell its assets to foreigners. Let's grasp that reality and redouble our efforts to be the best in the world. Because, right now, we as a nation are playing way beneath our abilities.